Mid-Day Report: Dollar Broadly Lower on Risk Appetite, Greece Still Awaited

Dollar is broadly lower today as risk appetites are lifted by German bill auction and bank stocks. Germany sold EUR 2.54b of 12-mont h bills today at average yield of 0.07%. That yield was much lower than October’s 0.346%. The auction attracted solid demand of EUR 5.53b of bids. Meanwhile, banking stocks in UK saw impressive strength with strong advance in RBS, Lloyds and HSBC leading FTSE and other major European indices higher. Dollar index is back below 80 psychological level and is set to take on 79.51 support.

Main focus remain on Greece and the EcoFin meeting in Eurozone. There is no details announced on Greece’s debt swap deal with private sector yet. But it’s believed that private bond holders are willing to take a loss of around 65 to 70% off their Greek debts. However, it’s still uncertain however the over deal could help Greece lower debt to 120% of GDP in 2020.

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Daily Report: Dollar Pressured as Asian Data Boosts Risk Appetite

Dollar remains under much pressured today as risk appetite is lifted by solid data from Asia. HSBC China manufacturing PMI rose for the second month to 52.9, the highest reading in five months, suggesting the economy is gaining momentum again. The data is also seen as a signal that another multi-month upswing has started in China as officials strengthened its commitment on completing the stimulus projects. From Japan, the quarterly Tankan large manufacturing index rose sharply from 1 to 8 in Q3 versus expectation of 7. Non-manufacturing index rose from -5 to 2 versus expectation of -2. Dollar index broke 79 level overnight after poor consumer confidence reading and continues to trade below 79 so far today. EUR/USD stays firmly above 1.35 level while old stays above 1311 level, reflecting market’s expectation on more quantitative easing from Fed going forward.

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